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Cloud, AI Security Startups Top Microsoft 2017 Corporate Acquisitions

Microsoft snapped up cloud startups, an AI innovator, an automated cyber-security specialist and more in 2017

Compared to the blockbuster $26 billion LinkedIn buy of 2016, Microsoft's acquisition haul for 2017 seems rather tame by comparison.

Although none of year's deals approach those stratospheric heights, at least in terms of dollar amounts, a closer examination yields some telling clues about the Redmond, Wash. tech titan's strategic priorities and where the company's leadership thinks the IT industry is headed.

Microsoft's pivot to a "cloud-first" company has been paying off. To help keep that momentum going and attract more enterprise workloads to its sprawling Azure cloud-computing platform, the company made two notable buys in 2017.

In April, Microsoft announced a deal to acquire Deis, a San Francisco startup that specialized in Kubernetes, the widely-adopted open-source container orchestration platform. Microsoft didn't disclose the financial terms of this deal, which is typical for acquisitions of smaller, privately-held startups. Now, Deis' is helping Microsoft's Azure Container Service become an enterprise-grade destination for containerized workloads.

On the high-performance computing (HPC) front, Microsoft acquired Cycle Computing in August. Not only does Microsoft now gain enhanced support for Linux-based HPC workloads, it inherits a customer base that includes leading life insurance companies, pharmaceutical giants and other corporate heavyweights.

AI That Speaks to Business Users

Microsoft is on a mission to democratize artificial intelligence by delivering a growing number of intelligent cloud services and software tools that enable developers and business users without a computer science degree to implement AI applications.

Reflecting that goal, the company announced on Jan. 13 that it had acquired Maluuba of Canada for an undisclosed sum. Maluuba's deep learning, reinforcement learning and language recognition technologies are helping Microsoft create AI systems that can absorb vast amounts of data, analyze it and communicate their findings much like colleagues share information with one another in the workplace.

Battling Breaches

In a year of massive security breaches, Microsoft stepped up its efforts to keep its business customers from becoming another headline-grabbing victim.

Microsoft announced on June 8 that it had agreed to acquire Hexadite, an AI-enabled automated security incident response startup from Israel. Again, Microsoft was tight-lipped on how much it was paying for the firm, but financial news outlet Calcalist pegged the deal's value at $100 million.

Creating Virtual Realities

In January, Microsoft acquired Donya Labs AB, a Swedish provider of automatic 3D data-optimization software best known for its Simplygon 3D product, for an undisclosed amount.

The technology is typically used by game developers to squeeze complex, resource-intensive 3D models down to size, allowing them to render on devices with modest graphics processing capabilities.

On Dec. 7, Microsoft launched Simplygon Cloud, which the company hopes will streamline and accelerate the development of 3D and mixed-reality (Microsoft's take on virtual reality and augmented reality) apps.

Meanwhile, Microsoft's mixed-reality strategy appears to be taking more social spin. In October, the company announced the acquisition of social virtual reality startup AltspaceVR, on terms that weren't publicly undisclosed. AltspaceVR allows users to create communities and virtual gathering spaces that they can explore and interact with using virtual reality headsets.